Last week, the Opportunity Equity strategy rose 1.44%, outperforming the S&P 500’s 0.52% increase. (Exhibit 1). The strategy ended the week up 8.14% YTD, 1,173 basis points behind the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 9/24/211
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (9/17 - 9/24) | 1.44% | 0.52% |
| MTD | -1.11% | -1.40% |
| QTD | -11.03% | 4.01% |
| YTD | 8.14% | 19.87% |
| Inception (annualized since 6/26/00) | 8.91% | 7.47% |
Source: Bloomberg, Miller Value Partners
Uber Technologies Inc. (UBER) rose through the 50-day and 100-day moving averages as the company announced that they had achieved their first months of EBITDA profitability in July and August. The company tightened 3Q revenue guidance to $22.8-23.2bn from $22-$24bn previously and increased EBITDA guidance to -$25mm to +$25mm from better than a loss of -$100mm previously. The company expects 4Q EBITDA of $0 to $100mm which is just below consensus of $120mm. Cowen increased their price target from $80 to $82 (upside of 75.9%), while Wolfe Research lowered their price target from $67 to $57 (upside of 22.3%) but reiterated an outperform rating. Stitch Fix, Inc. (SFIX) reported quarterly results that beat analyst expectations. Revenue came in at $571.2mm above consensus for $548mm with adjusted EBITDA of $55mm ahead of expectations of $18mm. Gross margin came in at an all-time high of 46.5%, which is up 50bps Q/Q and 160bps Y/Y. The company guided for FQ1 Revenue of $560-575mm below consensus of $591mm with EBITDA of $15-20mm vs the Street at $16mm. The company rolled out Direct Buy, now known as Freestyle, to the public during the quarter. Truist increased their price target from $60 to $77 (upside of 76.1%), Morgan Stanley increased their price target from $27 to $29 (downside of 33.7%), while Canaccord Genuity increased their price target from $65 to $76 (upside of 73.8%). Norwegian Cruise Line Holdings Ltd. (NCLH) rose through the 100-day and 200-day moving averages as the company CEO made comments suggesting the company may extend its 100% vaccinated traveler mandate past December 31st if Covid-19 conditions do not improve. Diamondback Energy Inc. (FANG) rose in sympathy with oil prices.
Exhibit 2: Significant Contributors to Performance, 9/17/21 - 9/24/21
| Name | Type | Return |
| Uber C32 1/22 | Derivative | 72.1% |
| Stitch Fix, Inc. | Equity | 23.2% |
| Norwegian Cruise Line Holdings Ltd. | Equity | 9.8% |
| Uber Technologies Inc. | Equity | 17.3% |
| Diamondback Energy Inc. | Equity | 7.4% |
Source: Miller Value Partners
Alibaba Group Holding Ltd. ADS (BABA) dropped along with most Chinese stocks on concerns over financial leverage due to conglomerate Evergrande’s debt crisis and fears of contagion. The company is planning to sell their 5% stake in Mango Excellent media at an estimated $350mm loss. MoffetNathanson cut their price target on DXC Technology Company (DXC) from $45 to $40 (upside of 14.5%) while downgrading the stock to neutral. Facebook Inc. (FB) fell after announcing that Apple’s new restrictions on data collection were weighing on their business during the quarter. Phillip Capital initiated coverage on with a buy rating and a price target of $424 (upside of 16.3%). There was limited news on WW International (WW).
Exhibit 3: Significant Detractors from Performance, 9/17/21 - 9/24/21
| Name | Type | Return |
| *New Security* | Derivative | -14.5% |
| Alibaba Group Holding Ltd. ADS | Equity | -9.4% |
| WW International | Equity | -9.1% |
| DXC Technology Company | Equity | -2.9% |
| Facebook Inc. Cl A | Equity | -3.2% |
-Source: Miller Value Partners
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1The performance figures reflect the results of a representative account net of management fee and certain other expenses. For important additional information about Opportunity Equity performance, please click on the Opportunity Equity Composite Performance Disclosure. The performance returns shown in this report are preliminary and are subject to revision. Past performance is no guarantee of future results.
Significant Contributors and Significant Detractors are the Strategy holdings that had the greatest effect on Strategy performance for the week. Holdings that have been in the Strategy since the end of the most recent calendar quarter are identified by name. For information on how Contributor/Detractor data were calculated and a list showing the contribution to the Strategy's weekly performance of each investment held at such quarter end, contact us.
Any views expressed are subject to change at any time, and Miller Value Partners disclaims any responsibility to update such views. The information presented should not be considered a recommendation to purchase or sell any security and should not be relied upon as investment advice. It should not be assumed that any purchase or sale decisions will be profitable or will equal the performance of any security mentioned. Past performance is no guarantee of future results, and there is no guarantee dividends will be paid or continued. Content may not be reprinted, republished or used in any manner without written consent from Miller Value Partners.
©2021 Miller Value Partners, LLC
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